I am about to close on a foreclosed home. It was listed in the property detail that the house was homestead.

Asked by Irene, Fenton, MI Mon Sep 22, 2008

However I called the township and it was not. This house will be my primary residence. I know it is impossible to change the property taxes to homestead but I would like to try. I am not willing to pay double every month for the taxes in my mortgage

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LYNN Afton, Agent, Big Rapids, MI
Tue Sep 23, 2008
Hi Irene,
Even though your Principal Residence Exemption will not take effect until January of 2009, make sure that your exemption is filed with the taxing authority (city, village or township) as soon as you become the owner. This document should be part of the package you will sign at closing.

You will then be listed as the owner of the property on the city or township tax roles, and you can ask your mortgage company to contact them in January to get a correct estimate of your 2009 taxes, (for the calculation of the monthly amount you will be paying into your escrow for those taxes to be paid from next year). Request a Re-analysis of your escrow for taxes in January, and provide the contact information for your taxing authority to the mortgage co. person that will handle it.

If it is not homesteaded now, your escrow portion of your mortgage payment will be higher until you make sure it is changed, and generally, so will the 2 months or so advance escrow amount for taxes that the lender will add in at closing. It is Michigan law that you must file by May 1 to have the exemption for any year. Just be glad that you are not buying the home in June!

For additional information on Michigan property tax questions:
http://activerain.com/blogsview/601855/Questions-on-Property-Taxes in Michigan
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Michelle Gor…, Agent, Ada, MI
Tue Sep 23, 2008
Tony - Really good answer!!!!
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Tony Grech, Mortgage Broker Or Lender, Southfield, MI
Tue Sep 23, 2008
Hi Irene,
These are all valid points and true. Your taxes cannot be homesteaded this year. You'll have to wait til '09 to file your homestead exemption.

The question I have for you is, is the property tax AMOUNT for 2008 different from what was listed in the property detail? If it is different (more) then you should inquire about getting something back from the seller since the amount of taxes was mis-represented. If the amount of taxes was not misrepresented then you should be happy. You were expecting to pay that much anyway and you were fine with it if that's how much the taxes on that particular home were, only now you have the added benefit of knowing they will go down next year!

At the end of they day, I doubt you are buying the home because the '08 taxes are homestead or not homestead. You are buying it because you want to live there and you feel you're getting good value.
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Ed & Cindy K…, Agent, Shelby Township, MI
Tue Sep 23, 2008
Irene as said before you will not be able to change this. The cut off date is May 1st so as long as you file as homestead you will get the lower tax in 2009.

Non homestead is 18 mills higher or 54% more in taxes in Fenton. Since you will be closing after 2008 summer taxes are paid you will be paying most of the higher tax as part of your closing costs. See if your mortgage rep can have them escow less, since 2009 taxes will be lower, which will lower your payment. If not although you will pay it every month, once they check your escrow account next your you will have an overage and you should get the money back.
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Nicole Sleeva, , Novi, MI
Tue Sep 23, 2008
Hi Irene -

You have some good advice here. One thing I would like to add...you won't be paying double. In the City of Fenton, it will depend on the school district for your millage rate. Double check with the Assessor's Office but in my experience, the non-homestead rate is generally 30% higher than the homestead rate you will receive on your Summer 2009 tax bill. Enjoy your new home!

Nicole Sleeva
Web Reference:  http://www.NicoleSleeva.com
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Michelle Gor…, Agent, Ada, MI
Tue Sep 23, 2008
Hi Irene, there is no way to change the homestead of the property till the begining of the year. Each township has a time period in which you can do this. If the home was non-homestead at the time of purchase (most bank owned are) and even if you knew this before hand, you still would have not been able to change the homestead status till next year. Sometimes you can off set the additonal cost by asking the seller to pay the difference...........some banks will and some will not. You should have recieved pre-title work that would have told you this info and/or the lender who is financing should have known when figuring out your cost...................in Grand Rapids we must have title to buyer with in 10 days of signed agreement, and I always ask for a good faith estimate from lender prior to putting offer on the home, so the buyer can see what their cost are. So if you knew in the beginging this home was non-homestead and no way to change it till the begining of the year would you have still wrote an offer on the home? Did you get a good faith estimate with your cost listed? If yes to both of these questions then - it is what it is................I have lived many places and the non-homestead tax was a new one on us when we moved here!
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Derek Bauer, Agent, South Lyon, MI
Mon Sep 22, 2008
Hello, Irene!

You must not have had a buyer's agent? The job of a buyers agent is to verify, confirm, check, and double-check that information.

Your sole recourse, on the tax issue, is to file your paperwork and wait to notice your homesteaded rate on your Summer '09 bill. Your Winter '08 bill will be non-homestead, and there is nothing you can do about that.

Enjoy your new home ... hopefully you got a great deal and the nominal amount in taxes will surely offset itself in very short order...
Web Reference:  http://www.DoorToDreams.com
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